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Obama names consumer advocate Warren to new post

WASHINGTON (AP) - President Barack Obama named Wall Street
critic Elizabeth Warren a special adviser Friday and tasked her
with setting up a new agency to look out for consumers in their
dealings with banks, mortgage companies and other financial
institutions.

Calling Warren "one of the country's fiercest advocates for the
middle class," Obama said she would ensure the Consumer Financial
Protection Bureau ends abusive practices.

"Never again will folks be confused or misled by pages of
barely understandable fine print that you find in agreements for
credit cards or mortgages or student loans," he said, standing
alongside Warren and Treasury Secretary Timothy Geithner in the
White House Rose Garden.

Obama credited Warren with developing the concept of the new
consumer agency, and he said, "It only makes sense that she should
be the architect."

Obama did not nominate Warren to be the bureau's director,
however. Instead he is creating a role that allows her to avoid a
lengthy confirmation fight with Senate Republicans who view her as
too critical of Wall Street and big banks. The business and banking
community opposed Warren as director, contending she would make the
agency too aggressive.

Warren designed the advisory role during long conversations with
White House officials.

The 61-year-old Harvard professor can assume her duties
immediately, leading a team of Treasury officials already laying
the groundwork for the bureau. Obama said Warren would eventually
help him choose the agency's chief.

White House press secretary Robert Gibbs sidestepped questions
about whether Warren herself would be in the running for the
director's post, saying only, "The president will nominate a
director and Elizabeth will be instrumental in filling that
position."

The financial regulation law creating the bureau gives the
Treasury Department authority to run it while the nomination of its
director is pending. The bureau won't write rules restricting
mortgages or credit cards until it assumes power from other
agencies - a move planned for July 21, 2011, according to a memo
Friday from Geithner.

Until then, it will be hiring staff, creating the new offices
and conducting research to inform later rule-making activities, the
memo says. That means Warren may not get much say in the two bureau
powers banks fear the most: onsite monitoring of the largest banks,
and writing rules to restrict products deemed unfair or deceptive.

Senate Banking Committee Chairman Chris Dodd, who had questioned
whether Warren would have enough support to win confirmation, said
Thursday the White House was within its rights to name her an
adviser and expert.

But he added on Bloomberg television, "We need a director.
We've got to have someone who is confirmable. The law requires that
there be a director of this bureau of consumer financial protection
and that that nominee be confirmed by the Senate."

Asked whether Warren would effectively be serving in that
capacity, Dodd replied: "You can't do that. You'll end up with too
much opposition. ... I'd be totally opposed to someone on a
backdoor operation here."

Warren has spent the past two years running the Congressional
Oversight Panel, charged with monitoring the Treasury Department's
handling of the $700 billion bank rescue fund known as the Troubled
Asset Relief Program. She stepped down from the panel just after
Friday's announcement.